Best Buy profits collapse

Best Buy has offered nearly its entire head office staff – 4,000 employees in total – voluntary redundancy and has vowed to slash capital expenditure in the wake of its profits collapsing and like-for-like sales slumping by over five per cent.

The retailer revealed that during its third quarter, which ended November 29th, like-for-like sales fell by 5.3 per cent and profits collapsed from $228m (£148m) to $52m (£34m).

Despite those falls and the threat of job losses, Best Buy Europe saw its revenues increase from $9.9bn (£6.4bn) to $11.5bn (£7.49bn). According to Best Buy, without BBE's figures included in the company as a whole, its sales "declined modestly" compared to the same point in 2007.

However, the firm was keen to stress that it was still planning to roll out its UK operation in the summer of 2009. Speaking to investors, Best Buy International chief executive Bob Willet said that it was "working closely together [with Carphone] on preparations for our first Best Buy stores in the United Kingdom next summer."

Best Buy's vice chairman and chief executive Brad Anderson warned that the market had changed and that retailers would have to adapt to that. "We also believe that customers will continue to reward those retailers who understand their needs and desires, and offer relevant solutions at fair prices," he said. "Yet we clearly recognize that these changes require us to make significant adjustments to our present cost structure.